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After releasing the latest Non-Farm Payroll (NFP) report, BTC showed signs of rallying, increasing by +6.35% in a single day. Will the rally continue, or will Bitcoin drop back down?

One of the most crucial monthly economic indicators for traders is the release of the U.S. Non-Farm Payroll Report. This data holds immense importance as it reflects job growth in the United States, the world’s largest economy, providing traders with valuable insights.

Barring a few exceptions due to market holidays, the non-farm payroll data is published at 8:30 a.m. Eastern Time on the first Friday of every month and promptly reaches the newswires.

While the report is extensive, most traders focus on three or four critical pieces of information, which are the most pertinent.

The primary focus for traders is the headline figure, the most significant figure in the report. When the actual number is released, the market reacts swiftly, with prices moving on whether more or fewer jobs have been created compared to market expectations.

The closely monitored U.S. nonfarm payrolls report revealed a slower-than-anticipated job growth in April, and the yearly wage increase fell below 4% for the first time in nearly three years.

Before the release, the leading cryptocurrency by market capitalization, Bitcoin, traded near $59,000, up over 4% from the previous day’s lows around $56,500. The report’s release on May 3rd propelled Bitcoin to $62,877, a 6.35% increase, followed by a surge above $64,000, but it has since retreated.

The Labor Department’s employment report also showed the unemployment rate rising to 3.9% from 3.8% in March, reflecting an increasing labor supply. Nonetheless, the jobless rate remained below 4% for the 27th consecutive month. Data revealed a decline in job openings in March.

A more sustainable pace of hiring is beneficial for the inflation outlook, alleviating concerns about a wage-price spiral and dismissing speculative talks about stagflation from certain trading circles.

Nonfarm payrolls increased by 175,000 jobs last month, the lowest in six months, according to the Labor Department’s Bureau of Labor Statistics. Revisions indicated 22,000 fewer jobs created in February and March than previously reported. Economists polled by Reuters had forecast payrolls advancing by 243,000, with estimates ranging from 150,000 to 280,000. April’s employment gains were below the 242,000 monthly average for the past year.

Michael Feroli, JPMorgan’s chief U.S. economist, stated, “We’re sticking with our call for a first ease in July. The market is not there, but we believe that if the next two job reports show continued cooling in labor market activity, the Fed will be comfortable taking back some of its policy restraint.”

According to data from the derivatives market, the highly bullish sentiment for Bitcoin since March has cooled off during the past few weeks.

On top exchanges, perpetual futures funding rates have lowered significantly since March and briefly turned negative over the past week. A negative funding rate indicates a bearish sentiment, as traders holding short positions must pay a fee to those holding long positions.

Meanwhile, the spread between Bitcoin’s spot price and three-month futures contracts has narrowed from above 35% in April to below 10%.

It’s been relatively quiet for crypto, with Bitcoin trading sideways. As the implied volatility drops in the options market, bitcoin will likely trade in a wide range of $58,000 to $72,000 in the next few months.

Still, bitcoin may resume its rally in September, potentially boosted by potential rate cuts from the Federal Reserve. According to the CME FedWatch Tool, traders are now pricing in two rate cuts by the end of the year, starting in September.

Meanwhile, as the U.S. presidential election approaches, it will likely create a favorable environment for crypto’s growth, as the uncertainty may increase demand for bitcoin.

Furthermore, based on historical data, bitcoin took about 200 days after each halving to reach a new all-time high. If history repeats itself, bitcoin may see a noticeable bull run in the third quarter of this year and peak in the fourth quarter.

One way to profit from Bitcoin is to follow fundamental news regarding BTC and the broader crypto community independently or the one hosted by a crypto trading platform. By staying informed, you’ll be well-positioned to take advantage when BTC eventually rallies.

Holding for the long term is one method of profiting from crypto. Another approach is shorter-term trading, such as day trading. Day traders can utilize tools like MetaTrader 5 to determine optimal entry points for day trading.

The goal of a day trader is to profit from intraday movements and trends across different financial assets. Trading positions are open for a few minutes to a few hours. Ultimately, being a successful day trader necessitates a powerful trading platform with advanced trading functions to identify better entry and exit points and achieve more precise timing.

While Bitcoin has faced headwinds in recent months, with pessimistic market sentiment and profit-taking weighing on its price, many factors point to the potential for a strong rally later this year. Historically, Bitcoin has followed a pattern of reaching new all-time highs approximately 200 days after each halving event. The most recent halving in 2024 could set the stage for significant gains in the latter part of the year. Additionally, the prospect of interest rate cuts from the Federal Reserve beginning in September and the uncertainty surrounding the U.S. presidential election may create an environment conducive to increased demand for Bitcoin as a hedge asset. Investors should remain vigilant, follow fundamental developments closely, and employ tools like MT5 to pinpoint optimal entry and exit points for trading activities.

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